The subprime crisis had exposed the limits of credit scores. The industry simply needed a better tool to assess lending risk.
“It became obvious to us that a credit score could not fundamentally answer the question of someone’s ability to repay a debt,”says Dann Adams, formerly president of Equifax Consumer Information Solutions in Atlanta. “Unless you knew that person’s income and could calculate debt-to-income, it would be very difficult to answer that question.”
Adams and Equifax went searching for a better solution—and found it in St. Louis. In 2007, Equifax acquired St. Louis-based TALX, which had developed an innovative employment and income verification system.
Now, Adams is president of Equifax Workforce Solutions, a company division that was formed in St. Louis following the TALX purchase.
Since the acquisition, Adams and his colleagues have taken the TALX income verification system—now called The Work Number—and made it a major national product.
“This service started with one client in 1995,” Adams says. “It took 11 years to get the next 1,500 clients and then another seven years to get the next 1,500 clients. Now, we’re adding 1,500 new clients every 18 months.”
The Work Number allows lending agencies to verify the income and employment status of potential borrowers. The borrower provides consent at the time of application, enabling the lender—who has been previously credentialed and authenticated by Equifax—to query a database and instantly receive the needed verification. With more than 5,000 of the nation’s employers currently contributing data to The Work Number to streamline the verifications process, there’s a good chance that the requested data is available.
Adams says The Work Number is a powerful tool that leads to better lending decisions and makes credit more accessible to working people who have poor credit scores. He believes it could help revolutionize the lending industry and bring down the cost of credit.
“We’re teaching the industry to use the employment details,” Adams says. “We think millions of consumers have been mispriced in America when evaluated by credit score alone. Equifax provide additional details that give lenders a more holistic view of the applicant and the ability to price differently. This leads to lower interest rates for many and qualification for those who might not have gotten access to credit otherwise.”
But The Work Number is only one component of Equifax Workforce Solutions. The company is currently the largest unemployment claims processor in the nation. It also offers an award-winning product to help companies comply with the Affordable Care Act.
“Great companies are known for the problems they solve, not for the products they sell,” Adams says. “With the cost of compliance increasing for large and small businesses, we’re here to facilitate lower cost of compliance through electronic means, easy access, and a better user experience.”
Equifax Workforce Solutions’ thirty percent growth over the last three years—with annual revenue now approaching $500 million—came as the company worked to integrate its solutions and services and leverage its data to provide better services to companies.
For example, the company has long been a leader in processing unemployment claims. But today, Equifax Workforce Solutions helps companies understand the reasons behind turnover, provides industry benchmarks, and offers data-driven best practices to help stem turnover.
With its nearly 2,000 Workforce Solutions employees , the majority of whom are based in the Show-Me State, Adams says Equifax is wholeheartedly committed to Missouri and is working hard each day to develop new solutions.
“We’re continually working to develop our talent and create a culture around innovation,” he says.